CHAPTER 164. VETERANS' FINANCIAL ASSISTANCE PROGRAM
NATURAL RESOURCES CODE
TITLE 7. RESOURCES PROGRAMS
CHAPTER 164. VETERANS' FINANCIAL ASSISTANCE PROGRAM
Sec. 164.001. PURPOSE AND POLICY. (a) The legislature declares
that it is the policy of the state to provide financial
assistance to veterans of the state in recognition of their
service to this state and the United States and to honor veterans
with a final resting place and with lasting memorials that
commemorate their service.
(b) The legislature declares that existing mechanisms for
implementing the policy stated in Subsection (a) of this section
may be enhanced by adoption of this chapter and implementation of
the financial assistance programs authorized by this chapter.
(c) The legislature finds that this chapter and the financial
assistance programs authorized by this chapter are in furtherance
of a public purpose.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 2001, 77th Leg., ch. 981, Sec. 1, eff. Nov.
6, 2001.
Sec. 164.002. DEFINITIONS. (a) In this chapter:
(1) "Board" means the Veterans' Land Board.
(2) "Bonds" means the revenue bonds issued by the board under
this chapter.
(3) "Financial assistance" means the purchase of land, the sale
of land to veterans, and the making of home mortgage loans to
veterans, as provided for in this chapter.
(4) "Home" means a dwelling within this state in which a veteran
intends to reside as the veteran's principal residence.
(5) "Lending institution" means a bank, trust company, savings
bank, national banking association, savings and loan association,
building and loan association, mortgage banker, mortgage company,
credit union, life insurance company, or other financial
institution that customarily provides service or aids in the
financing of mortgages on single-family residential housing that
has been approved for participation by the board, including a
holding company for a lending institution.
(6) "Veteran" has the meaning assigned by Section 161.001.
(7) "Veterans cemetery" means a burial ground operated solely
for the burial of veterans and their eligible relatives.
(8) "Veterans home" means a life care facility, retirement home,
retirement village, home for the aging, or other facility that
furnishes shelter, food, medical attention, nursing services,
medical services, social activities, or other personal services
or attention to veterans.
(b) Repealed by Acts 2003, 78th Leg., ch. 1145, Sec. 5.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 1997, 75th Leg., ch. 71, Sec. 5, eff. May
9, 1997; Acts 2001, 77th Leg., ch. 981, Sec. 2, eff. Nov. 6,
2001; Acts 2003, 78th Leg., ch. 1145, Sec. 4, 5, eff. June 20,
2003.
Sec. 164.003. FINANCIAL ASSISTANCE PROGRAMS. The board may
establish one or more programs for providing financial assistance
to veterans under this chapter. A program may be limited to the
purpose of purchasing land, selling land to veterans, making home
mortgage loans to veterans, or providing one or more veterans
homes or veterans cemeteries. To the extent a financial
assistance program is for the purpose of purchasing land or
selling land to veterans, the program shall be administered, to
the extent consistent with this chapter and otherwise deemed
practicable and desirable by the board, in accordance with the
board's Veterans' Land Program. To the extent a financial
assistance program is for the purpose of making home mortgage
loans to veterans, the program shall be administered, to the
extent consistent with this chapter and otherwise deemed
practicable and desirable by the board, in accordance with the
board's Veterans' Housing Assistance Program.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 1997, 75th Leg., ch. 71, Sec. 6, eff. May
9, 1997; Acts 2001, 77th Leg., ch. 981, Sec. 3, eff. Nov. 6,
2001.
Sec. 164.004. RULES. The board shall adopt rules providing for
the administration of its financial assistance programs
established under this chapter, including rules concerning:
(1) the purchasing of land and the selling of land to veterans;
(2) the making of home mortgage loans to veterans;
(3) the use of insurance on land and homes as deemed appropriate
by the board, as further security for land sold or home mortgage
loans made;
(4) the criteria for approving lending institutions
participating in programs;
(5) the terms and conditions of a contract made with a lending
institution;
(6) the construction, acquisition, ownership, operation,
maintenance, enlargement, improvement, or furnishing or equipping
of veterans homes or veterans cemeteries; and
(7) other matters as the board deems appropriate.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 1997, 75th Leg., ch. 71, Sec. 7, eff. May
9, 1997; Acts 2001, 77th Leg., ch. 981, Sec. 4, eff. Nov. 6,
2001.
Sec. 164.005. RIGHTS AND POWERS OF BOARD. (a) In connection
with the administration of its financial assistance programs
under this chapter, the board has and may exercise, to the extent
not inconsistent with this chapter, all the rights and powers
granted to it by Chapters 161 and 162 of this code relating to
the administration of the board's Veterans' Land Program and
Veterans' Housing Assistance Program.
(b) In administering any of the board's financial assistance
programs relating to veterans homes, the board, or the board in
conjunction with other state or federal agencies, may acquire by
purchase, gift, devise, lease, or a combination of those methods,
construct, operate, enlarge, improve, furnish, or equip one or
more veterans homes.
(c) The board may enter into an agreement with any person for
the management or operation of all or part of a veterans home or
all or part of a veterans cemetery. The board may delegate to the
manager the authority to manage the veterans home or veterans
cemetery and to employ and discharge employees.
(d) The board may not authorize the use of any veterans home in
a manner that would entitle the United States to recover any
amounts pursuant to 38 U.S.C. Section 8136, as amended, or any
successor statute.
(e) On terms and conditions acceptable to it, the board may
accept and administer gifts, grants, or donations for the
support, acquisition, construction, operation, enlargement,
improvement, furnishing, or equipping of veterans homes or
veterans cemeteries and may enter into agreements with a
nonprofit corporation for the solicitation, receipt, and
disbursement of the gifts, grants, or donations.
(f) The board, the chairman of the Texas Veterans Commission,
and two representatives of the veterans community selected by the
chairman of the Texas Veterans Commission shall:
(1) establish the guidelines for determining:
(A) the location and size of veterans cemeteries; and
(B) the eligibility for burial in a veterans cemetery; and
(2) select up to seven locations across the state for veterans
cemeteries.
(g) In administering any of the board's financial assistance
programs relating to veterans cemeteries, the board, or the board
in conjunction with other state or federal agencies, may plan and
design, operate, maintain, enlarge, or improve veterans
cemeteries.
(h) Of the funds available in the veterans' land fund, the
veterans' housing assistance fund, and the veterans' housing
assistance fund II that may be used for veterans cemeteries, the
board may spend not more than $7 million each fiscal year to plan
and design, operate, maintain, enlarge, or improve veterans
cemeteries. The board may not use funds from the veterans' land
fund, the veterans' housing assistance fund, or the veterans'
housing assistance fund II to acquire land to be used for a
veterans cemetery.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 1997, 75th Leg., ch. 71, Sec. 8, eff. May
9, 1997; Acts 1999, 76th Leg., ch. 134, Sec. 6, eff. May 20,
1999; Acts 2001, 77th Leg., ch. 981, Sec. 5, eff. Nov. 6, 2001.
Sec. 164.0051. LOCATION OF VETERANS HOMES. To the extent
practicable, when determining the location of new veterans homes
in this state, the board shall consider:
(1) the geographic proximity to existing state veterans homes
with special regard to areas not served by state veterans homes;
(2) the economic impact of the veterans home on the local
community and the veterans program; and
(3) the areas with a significant veteran population, without
regard to international boundaries.
Added by Acts 2001, 77th Leg., ch. 746, Sec. 1, eff. June 13,
2001.
Sec. 164.006. ISSUANCE OF BONDS. For the issuance of bonds
under this chapter, the board may exercise the authority granted
to the governing body of an issuer with regard to issuance of
obligations under Chapter 1371, Government Code, to the extent
that it is not inconsistent with this chapter.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.358, eff.
Sept. 1, 2001.
Sec. 164.007. CONDITIONS FOR ISSUANCE OF BONDS. (a) Bonds may
be issued in various series and issues.
(b) Bonds shall be payable as provided by the board and may
mature serially or otherwise.
(c) Bonds shall be redeemable before maturity or subject to
tender for purchase at the price or prices and under the terms
and conditions fixed by the board in the resolution providing for
the issuance and sale of the bonds.
(d) Bonds may bear a fixed, variable, floating, or other rate or
rates of interest or may bear no interest, as determined by the
board.
(e) Bonds may be sold at public or private sale at a price or
prices and on terms determined by the board.
(f) Bonds issued under this chapter for a purpose other than
buying back or refunding general obligation bonds issued under
Article III, Section 49-b, 49-b-1, or 49-b-2, of the Texas
Constitution may not in the aggregate exceed $1 billion.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 2001, 77th Leg., ch. 875, Sec. 1, eff. June
14, 2001.
Sec. 164.008. FORM OF BONDS. (a) The bonds may be issued in
the form, denominations, and manner and under the terms,
conditions, and details as provided by the board in the
resolution authorizing their existence.
(b) The bonds shall be signed and executed as provided by the
board's resolution or order authorizing the issuance of the
bonds.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.
Sec. 164.009. SECURITY FOR THE BONDS. (a) The bonds issued
under this chapter shall be special obligations of the board. As
security for the payment of the bonds, the board may provide for
a pledge of and lien or mortgage on:
(1) the receipts of all kinds of the veterans' land fund, the
veterans' housing assistance fund, and the veterans' housing
assistance fund II determined by the board, on the basis of
facts, circumstances, and expectations at the time of issuance of
the bonds, not to be required for the payment of principal of or
interest on the general obligation bonds issued by the board to
augment the funds or to make payments with respect to principal
or interest under a bond enhancement agreement with respect to
the general obligation bonds;
(2) the assets of the veterans' land fund, the veterans' housing
assistance fund, or the veterans' housing assistance fund II
determined by the board on the basis of facts, circumstances, and
expectations at the time of issuance of the bonds not to be
required for the purposes of the fund;
(3) the payments and repayments received by the board from the
board's financial assistance provided under this chapter;
(4) other program revenues;
(5) other available revenues of the board; and
(6) one or more veterans homes.
(b) The pledge and lien or mortgage are to be provided for and
determined in accordance with the resolution of the board
providing for the issuance and sale of the bonds.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 1993, 73rd Leg., ch. 242, Sec. 3.02; Acts
1997, 75th Leg., ch. 71, Sec. 9, eff. May 9, 1997; Acts 1999,
76th Leg., ch. 134, Sec. 7, eff. May 20, 1999; Acts 2003, 78th
Leg., ch. 590, Sec. 1, eff. Sept. 13, 2003.
Sec. 164.010. BOND ENHANCEMENT AGREEMENTS. (a) The board may
at any time and from time to time enter into one or more bond
enhancement agreements that the board deems to be necessary or
appropriate to place the obligation of the board, as represented
by the bonds, in whole or in part, on the interest rate,
currency, cash flow, or other basis desired by the board. Bond
enhancement agreements may include, on terms and conditions
approved by the board, interest rate swap agreements, currency
swap agreements, forward payment conversion agreements,
agreements providing for payments based on levels of or changes
in interest rates or currency exchange rates, agreements to
exchange cash flows or a series of payments, or agreements
including options, puts, or calls, to hedge payment, currency,
rate, spread, or other exposure. A bond enhancement agreement is
an agreement for professional services and shall contain the
terms and conditions and be for the period that the board
approves. The cost to the board of the bond enhancement agreement
may be paid from the proceeds of the sale of the bonds to which
the bond enhancement agreement relates or from any other source,
including the revenues of the board that are available for the
purpose of paying the bonds or that may otherwise be available to
make those payments.
(b) The resolution of the board authorizing a bond enhancement
agreement may authorize one or more designated officers or
employees of the board to act on behalf of the board in entering
into and delivering the bond enhancement agreement and in
determining or setting the counterparty and terms of the bond
enhancement agreement specified in the resolution, except that
the resolution must set the maximum amount and term for the bond
enhancement agreement.
(c) Unless the board elects otherwise in its approval of a bond
enhancement agreement, the bond enhancement agreement is not a
credit agreement for purposes of Chapter 1371, Government Code,
regardless of whether the bonds relating to the bond enhancement
agreement were issued in part under that law.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 1997, 75th Leg., ch. 71, Sec. 10, eff. May
9, 1997; Acts 2001, 77th Leg., ch. 1420, Sec. 8.359, eff. Sept.
1, 2001.
Sec. 164.011. FUNDS. (a) In the resolution authorizing the
issuance of bonds, the board may make additional covenants with
respect to the bonds and the pledged revenues and may provide for
the flow of funds and the establishment, maintenance, and
investment of funds. The funds established may include an
interest and sinking fund, a reserve fund, and other funds that
will be kept and maintained by or under the direction of the
board.
(b) The board may by resolution provide for the establishment,
maintenance, and investment of additional funds into which the
board may deposit revenues from any financial assistance program
under this chapter that are not pledged to bonds, including any
gifts, grants, or donations accepted by the board for the
support, acquisition, construction, operation, enlargement,
improvement, furnishing, or equipping of veterans homes or
veterans cemeteries.
(c) Funds established by the board under this chapter are not to
be part of the State Treasury and are not subject to Subchapter
F, Chapter 404, Government Code. Any provision of this chapter or
other law that provides for the deposit of money or another thing
of value into the funds prevails over the requirements of
Subchapter F, Chapter 404, Government Code. The funds shall
remain under the control of the board but, at the direction of
the board, may be kept and held in escrow and in trust by the
comptroller on behalf of the board and the owners of the bonds
and used only as provided by this chapter.
(d) Money in a fund shall be invested in investments authorized
as provided by a resolution or order of the board.
(e) Legal title to money in a fund is in the board unless or
until paid from the fund as provided by this chapter or the
resolution authorizing the issuance of the bonds or the
establishment of the fund.
(f) The board shall select the comptroller or one or more
commercial banks, depository trust companies, or other entities
to serve as custodian of the cash or securities of a fund and may
authorize the custodian to invest the cash in investments as
determined by the board.
(g) In managing the assets of a fund, the board may permit the
custodian of the fund's securities to lend the securities as
provided by this section and by rules adopted by the board.
(h) To be eligible to lend securities under this section, a
custodian selected under Subsection (f) must be experienced in
the operation of a fully secured securities loan program and
must:
(1) maintain adequate capital in the prudent judgment of the
board to assure the safety of the securities;
(2) execute an indemnification agreement satisfactory in form
and content to the board fully indemnifying the board against
loss resulting from the custodian's operation of a securities
loan program for the fund's securities; and
(3) require any securities broker or dealer to whom it lends
securities of the fund to deliver and maintain with the custodian
collateral in the form of cash, United States government
securities, or letters of credit that are issued by banks rated
as to investment quality not less than A or its equivalent by a
nationally recognized investment rating firm in an amount equal
to at least 100 percent of the market value, from time to time,
of the loaned securities.
(i) The board shall require the custodian or custodians of a
fund to administer the fund solely and strictly as provided by
this chapter and the resolution authorizing the issuance of the
bonds, and the state may not take any other action relating to
the fund except those specified in this chapter and the
resolution authorizing the issuance of the bonds or the
establishment of the fund.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 1997, 75th Leg., ch. 71, Sec. 11, eff. May
9, 1997; Acts 1997, 75th Leg., ch. 1423, Sec. 14.23, eff. Sept.
1, 1997; Acts 1999, 76th Leg., ch. 134, Sec. 8, eff. May 20,
1999; Acts 2001, 77th Leg., ch. 981, Sec. 6.
Sec. 164.012. RESOLUTIONS. (a) The resolution authorizing the
issuance of the bonds may prohibit the further issuance of bonds
or other obligations payable from the pledged revenues or may
reserve the right to issue additional bonds to be secured by a
pledge of and payable from the revenue on a parity with or
subordinate to the lien and pledge in support of the bonds being
issued.
(b) The resolution of the board authorizing the issuance of the
bonds may include other provisions and covenants that the board
determines necessary.
(c) In a resolution authorizing the issuance of bonds, the board
may prescribe systems, methods, routines, and procedures under
which the board will function.
(d) The board may adopt and have executed any other proceedings
or instruments necessary or convenient in the issuance of bonds.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.
Sec. 164.013. INVESTMENT SECURITIES. The bonds and any interest
coupons are investment securities under Chapter 8, Business &
Commerce Code, and may be issued registrable as to principal or
as to both principal and interest or may be made redeemable
before maturity at the option of the authority or may contain a
mandatory redemption provision.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.
Sec. 164.014. APPROVAL OF THE ATTORNEY GENERAL. Bonds issued
under this chapter are subject to review and approval by the
attorney general in the same manner and with the same effect as
provided by Chapter 1371, Government Code.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.360, eff.
Sept. 1, 2001.
Sec. 164.015. REFUNDING BONDS. (a) The board may issue
refunding bonds to refund all or part of its outstanding bonds
issued under this chapter, including matured but unpaid interest.
(b) The board may refund bonds in the manner provided by general
law for revenue bonds.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.
Sec. 164.016. BONDS AS INVESTMENTS AND SECURITY. (a) The bonds
are legal and authorized investments for banks, savings banks,
trust companies, savings and loan companies, insurance companies,
fiduciaries, trustees, guardians, the sinking funds of cities,
towns, villages, counties, school districts, and other political
subdivisions of the state, and other public funds of the state
and its agencies.
(b) The bonds are eligible to secure deposits of public funds of
the state and cities, counties, school districts, and other
political subdivisions of the state. The bonds are lawful and
sufficient security for deposits to the extent of their par
value.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.
Sec. 164.017. TAX EXEMPT. Since the board is performing an
essential governmental function in the exercise of the powers
conferred on it by this chapter, the bonds issued under this
chapter, and the interest and income from the bonds, including
any profit made on the sale of bonds, and all fees, charges,
gifts, grants, revenues, receipts, and other money received or
pledged to pay or secure the payment of bonds are free from
taxation and assessments of every kind by this state and any
city, county, district, authority, or other political subdivision
of this state.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.
Sec. 164.018. NO PLEDGE OF STATE FAITH AND CREDIT; COVENANT WITH
OWNERS OF BONDS. (a) Bonds issued under this chapter are
special obligations of the board and are payable only from and
secured only by the revenues and assets pledged to secure payment
of the bonds under the Texas Constitution and this chapter, and
the bonds are not and do not create or constitute a pledge, gift,
or loan of the faith, credit, or taxing authority of the state.
(b) Each bond must include a statement that the faith or credit
and the taxing authority of the state are not pledged, given, or
loaned to secure payment of the principal of, or premium or
interest on the bonds.
(c) The state pledges to and agrees with the owners of bonds
issued under this chapter that the state will not limit or alter
the rights vested in the board to fulfill the terms of agreements
made with the owners of the bonds or in any way impair the rights
and remedies of those owners until the bonds, together with any
premium and interest, interest on any unpaid premium or
installments of interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of those
owners, are fully met and discharged. The board may include this
pledge and agreement of the state in an agreement with the owners
of the bonds.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.
Sec. 164.019. ENFORCEMENT BY MANDAMUS. A writ of mandamus and
all other legal and equitable remedies are available to a party
in interest to require the board and any other party to carry out
agreements and to perform functions and duties under this
chapter, the Texas Constitution, or the board's bond resolutions
or orders.
Added by Acts 1993, 73rd Leg., ch. 242, Sec. 3.01, eff. Aug. 30,
1993.